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Assessment of effectiveness of China aid in financing development in Sudan

This paper discusses the effectiveness of Chinese development aid to Sudan. It finds that there has been a significant increase in Chinese loans and grants offered to the country, but these have had mixed impacts. They provided alternative sources of finance to complement domestic capital and financing to development projects, but simultaneously Sudan’s debts to China increased from 0.9 per cent in 1999 to 13.45 per cent in 2007. The paper argues that the effectiveness of Chinese aid is undermined by China offering aid tied to trade, foreign direct investment and importance of oil to the Chinese economy, and explains that despite the recent global economic crisis, China has maintained offering tied aid to maintain its access to oil in Sudan. The findings imply that even when a country is facing binding political and economic sanctions, it can still be able to finance a high growth strategy, if it is endowed with natural resources and a partner that is in need for such resources.